Multi-Family Rental: Construction/Rehabilitation

This is a product funded by the Member Loan Pool where NLP is also providing the permanent financing. With NLP acting as the lender for both the construction/rehabilitation phase and the permanent phase, there is only one loan, one loan fee, one loan closing, and one lender. This product is intended to be utilized when new construction and/or major rehabilitation is involved and multiple loan fundings is the best method of disbursement. Multi-family rental properties are properties with at least five rental units.

The primary loan structure parameters are presented under Lending Guidelines.

The following items are specific to the Construction/Rehabilitation Loan structure.

• A loan processing fee will be charged for each disbursement, ranging from $200-$300.
• The loan shall be structured to include an interest reserve and possibly an operating reserve.
• All loans approved for rehabilitation may be required to have a contingency fund equal to 10% of all costs relating to the rehabilitation.

Prior to converting from the construction/rehabilitation phase to the permanent phase, the property must meet minimum leasing and debt service coverage requirements, typically tied to occupancy standards, break-even performance and continued expectation of achieving the required minimum debt service coverage upon stabilization.